Segment Reporting, Decentralization, and the Balanced Scorecard
Prepare a new contribution format segmented income statement for May. Show a Total col-
umn as well as data for each region. In addition, for the company as a whole and for each sales
region, show each item on the segmented income statement as a percent of sales.
Analyze the statement that you prepared in part (3) above. What points that might help to
improve the company's performance would you bring to management's attention?
CASE 12-28 Service Organization; Segment Reporting [LOll
Music Teachers, Inc., is an educational association for music teachers that has 20,000 members. The
association operates from a central headquarters but has local membership chapters throughout the
United States. Monthly meetings are held by the local chapters to discuss recent developments on
topics of interest to music teachers. The association's journal,
is issued monthly
with features about recent developments in the field. The association publishes books and reports
and also sponsors professional courses that qualify for continuing professional education credit. The
association's statement of revenues and expenses for the current year is presented below.
Reimbursement of member costs to local chapters .
Other membership services
Printing and paper
Postage and shipping
General and administrative
Excess of revenues over expenses
The board of directors of Music Teachers, Inc., has requested that a segmented income state-
ment be prepared showing the contribution of each profit center to the association. The association